In light of the latest data on the pandemic, here are some tips for managing your hospitality business between now and next year; four fundamental points on which to set up a new sales strategy in this year ONE of world tourism.
Published on December 21, 2020
It is precisely the uncertainty that will characterize the near future in the world tourism landscape, given that the long wave of the pandemic seems to continue in 2021.
Without prejudice to the fact that the protection of health is certainly a priority at any level, the evolution of the pandemic data and the recent further government restrictions in the short / medium term (with the possibility of prolongation over time) lead to the emergence of a domestic and international tourism scenario where it seems that in the best of cases 2021 will not even approach the levels of 2009.
Yet, we tourism operators must go ahead and remain lucid, starting from the foundations: the study of supply and demand.
Normally in the Revenue Management school of thought, the study of historical data is the starting point for developing the entire sales strategy for the current year; then the analysis on Average Daily Rate, data on daily occupancy and by type, sales distribution channels, type of customers, analysis of booking windows...
Now, in this year ONE of world tourism, we should partially abandon this starting point and focus instead on the following four points:
- reshape the organizational and management structure to control operating costs
- understand and anticipate the demand
- develop the correct commercial strategy and starting pricing
(“last but not least”, because I think it is - if not the most important - the most significant in this new contest)
- monitor the market on a daily basis and adapt to it, modifying strategies (prices, sales conditions, commercial channels) in the short and medium term.
We will certainly have a strong contraction in demand (national, but also international): on the one hand the booking window is shrinking and we will have a much more important last minute demand, on the other we must also be bookable in the long term to increase visibility.
The business market will also lose significant volumes following the increase of smart working and video meetings.
Furthermore, this leisure demand will require greater flexibility in rates and conditions of sale.
At the level of demand / needs of the leisure customer, it is likely an increase of demand for “slow” rather than “fast” tourism proposals (to “live more in the moment”): yes to customized experience and slow travel, in the name of local traditions and environmental sustainability.
The management of uncertainty and unpredictability due above all to distorting variables has always been a prerogative of our way of doing Revenue MGMT. Having had the opportunity to work with hotels in various European countries over the past 10 years, I often found myself facing sudden crises following natural disasters, terrorist attacks (Paris 2015, Brussels 2016, Barcelona 2017), tensions or other socio-political phenomena that really brought hotels and accommodations to their knees.
Obviously in the history of our Team, we have never been faced with an event that could impact the tourist trend in this way, but this does not catch us unprepared: we will face a very hysterical market curve, completely different to the one of recent years, for which the functional adaptation must and will necessarily be real time.
It will always be a question of understanding what is the maximum sales potential that we can achieve in this context, and obviously doing everything to achieve it, in the correct ways and times.
Resilience and professionalism will allow us to overcome this obstacle and project ourselves to a better time, for tourism and for the world in general.
Fabio Morandin
CEO at MoreHotelier, Outsourced Revenue Management